Samantha Shafer v. Red Tie, LLC dba Red Tie Gentlemen's Club

1 O [7] United States District Court [8] Central District of California [10] 11 SAMANTHA SHAFER, Case No. 2:20-cv-05726-ODW (PVCx) 12 Plaintiff, v. ORDER GRANTING IN PART 13 MOTION FOR CONDITIONAL 14 RED TIE, LLC dba RED TIE CERTIFICATION OF GENTLEMEN’S CLUB; MIKE 15 COLLECTIVE ACTION AND MUDARIS, an individual; DOE ISSUANCE OF NOTICE [22], AND 16 MANAGERS 1–3; and DOES 4–100, GRANTING IN PART MOTION inclusive, 17 FOR LEAVE TO AMEND COMPLAINT [30] [18] Defendants. [19] 20 I. INTRODUCTION 21 Plaintiff Samantha Shafer filed this putative collective action against 22 Defendants Red Tie LLC and Mike Mudaris for allegedly violating several provisions 23 of the Fair Labor Standards Act (“FLSA”) by misclassifying workers like herself as 24 independent contractors, failing to pay minimum and overtime wages, and 25 implementing illegal practices regarding the taking and sharing of tips. (Compl. 26 ¶¶ 100–40, ECF No. 1.) Since the Complaint was filed, three individuals have opted 27 in as additional Plaintiffs: Ida Hurley on August 30, 2020; Aeja Hurt on 28 September 27, 2020; and Alexis Jackson on October 13, 2020. (Hurley Consent 1 Form, ECF No. 19-1; Hurt Consent Form, ECF No. 20–1; Jackson Consent Form, 2 ECF No. 21-1.) 3 Now, Shafer, Hurley, Hurt, and Jackson (“Plaintiffs”) move for conditional 4 certification of this case as a collective action under 29 U.S.C. § 216 (b) and 5 permission to issue notice of this action to dancers who have performed at 6 Defendants’ establishment in the past three years. (Mot. Cond. Cert. & Issuance of 7 Not. (“Mot. Cond. Cert.”), ECF No. 22.) The Motion for Conditional Certification is 8 fully briefed. (See Mot. Cond. Cert.; Opp’n Cond. Cert., ECF No. 24; Reply Cond. 9 Cert., ECF No. 28.) 10 Plaintiffs also move for leave to file a First Amended Complaint (1) joining 11 Ingrid Goulding and Bob Simoni as defendants, and (2) adding the opt-in Plaintiffs’ 12 names to the case caption. (Mot. Leave Am. Compl. (“Mot. Leave”), ECF. No. 30.) 13 The Motion for Leave is also fully briefed. (Mot. Leave; Opp’n Leave, ECF No. 31; 14 Reply Leave, ECF No. 32.) 15 After carefully considering the papers filed in connection with the Motions, the 16 Court deemed the matters appropriate for decision without oral argument. Fed. R. 17 Civ. P. 78; C.D. Cal. L.R. 7-15. For the following reasons, both Motions are 18 GRANTED in part. 19 II. BACKGROUND 20 Defendants “operate an adult-oriented entertainment facility.” (Compl. ¶ 27.) 21 In July 2018, Shafer began working as a dancer at Defendants’ club. (Id. ¶ 30.) 22 Shafer alleges that Defendants misclassified her as an independent contractor and 23 failed to pay hourly wages, minimum wages, or overtime. (See id. ¶¶ 100–14.) 24 Instead, she was compensated only through tips, which she was required to share with 25 managers, disk jockeys, and bouncers. (See id. ¶¶ 44–45, 115–40). Shafer alleges 26 Defendants exercised control over her work by setting her schedule, setting cover 27 charges and VIP prices, and establishing rules regarding dances, music, and costumes. [28] 1 (See id. ¶¶ 35–43.) Defendants allegedly mistreated other dancers in the same ways. 2 (See id. ¶ 62 ; Decl. of Ida Hurley ¶¶ 10–21, ECF No. 22-1.) 3 Now before the Court are Plaintiffs’ two Motions. The Court addresses 4 Shafer’s Motion for Leave first, before turning to Shafer’s Motion for Conditional 5 Certification. 6 III. MOTION FOR LEAVE TO AMEND 7 As mentioned above, Hurley, Hurt, and Jackson opted into this lawsuit after the 8 Complaint was filed. When Plaintiffs subsequently filed their Motion for Conditional 9 Certification, they added Hurley, Hurt, and Jackson’s names to the case caption. (See 10 Mot. Cond. Cert.) Defendants objected to the change in caption as improper. (Opp’n 11 Cond. Cert. 1–4.) Then, Plaintiffs filed their Motion for Leave, seeking permission to 12 (1) add Hurley, Hurt, and Jackson to the case caption; (2) change any reference to 13 “Plaintiff” in the Complaint to be plural (i.e., “Plaintiffs”); and (3) join Goulding and 14 Simoni as defendants. (See Mot. Leave 4.) Notably, with respect to Plaintiffs’ 15 Motion for Leave, Defendants oppose only the request to amend the case caption. 16 (Opp’n Leave 1.) 17 Federal Rule of Civil Procedure (“Rule”) 15 provides that leave to amend a 18 pleading shall be liberally granted, but such leave is not automatic. In re W. States 19 Wholesale Nat. Gas Antitrust Litig., 715 F.3d 716, 738 (9th Cir. 2013). “[T]he grant 20 or denial of an opportunity to amend is within the discretion of the District Court.” 21 Foman v. Davis, 371 U.S. 178, 182 (1962). “There is very little case law regarding 22 the legal standard for amending a caption, and no federal or local rule governs caption 23 amendments.” Hoemke v. Macy's W. Stores LLC, No. CV-20-01317-PHX-DWL, [24] 2020 WL 5229194 , at *1 (D. Ariz. Sept. 2, 2020). However, “the caption of an action 25 is only the handle to identify it,” and it does not ordinarily govern the content of the 26 action. Hoffman v. Halden, 268 F.2d 280, 303 (9th Cir. 1959), overruled on other 27 grounds by Cohen v. Norris, 300 F.2d 24 (9th Cir. 1962). “In the absence of authority 28 to the contrary, it appears that whether to amend a case caption is within the Court’s 1 discretion and should be based on factors such as promoting clarity and avoiding 2 confusion.” Hoemke, 2020 WL 5229194 , at *1. 3 Here, Defendants argue that amending the case caption would cause issues 4 because “[t]here are significant differences between the named plaintiff and the ‘opt5 in’ plaintiffs in a [FLSA action].” (Opp’n Leave 2.) However, the FLSA does not 6 distinguish between opt-in plaintiffs and original plaintiffs. See Campbell v. City of 7 Los Angeles, 903 F.3d 1090, 1105 (9th Cir. 2018) (“[T]he result of joining the 8 collective is the same status in relation to the claims of the lawsuit as that held by the 9 original named plaintiffs.” (internal quotation marks and alterations omitted)). 10 Nevertheless, this does not mean the caption must be amended. Local Rule 1111 3.8(d), upon which Plaintiffs rely, requires only that all parties be named in the 12 caption of an initial pleading. See C.D. Cal. L.R. 11-38(d) (“In all documents, after 13 the initial pleadings, the names of the first-named party only on each side shall 14 appear.”). The Court sees no reason to amend the caption now. Furthermore, to the 15 extent the parties believe the caption has any effect on their rights or obligations, 16 particularly with respect to class decertification, they are mistaken. Hurley, Hurt, and 17 Jackson properly joined the action by filing consent forms, and all three may be 18 dismissed if circumstances dictate. See Campbell, 903 F.3d at 1109 (“The employer 19 can move [later] for ‘decertification’ of the collective action for failure to satisfy the 20 ‘similarly situated’ requirement in light of the evidence produced to that point.”). 21 Defendants do not object to any other proposed amendment. (Opp’n to 22 Leave 1.) Thus, for the reasons covered above, Plaintiffs’ Motion for Leave is 23 GRANTED in part. (ECF No. 22.) Plaintiffs may file a First Amended Complaint 24 with the proposed changes, but the caption shall remain unchanged. 25 IV. MOTION FOR CONDITIONAL CERTIFICATION 26 Next, Plaintiffs move for conditional certification as a collective action and 27 allowance of notice to putative collective members. (See Mot. Cond. Cert.) 28 Specifically, Plaintiffs seek to issue notice to all “dancers who have performed at the 1 defendants’ club Red Tie in the past three years.” (See Prop. Cond. Cert. Order, ECF 2 No. 22–5.) 3 A “collective action” brought under the FLSA is “fundamentally different” 4 from a class action under Rule 23. Genesis Healthcare Corp. v. Symczyk, 569 U.S. 5 66, 66 (2013). “[U]nlike in the Rule 23 context, the district court in a collective action 6 plays no . . . gatekeeping role.” Campbell, 903 F.3d at 1101 . Rather, in a collective 7 action under the FLSA, district courts analyze the question of “certification” in a two8 stage process. See id. at 1109 . 9 In the first stage (which the Court now performs) “[p]reliminary 10 certification . . . refers to the dissemination of notice to putative collective members, 11 conditioned on a preliminary determination that the collective as defined in the 12 complaint satisfies the ‘similarly situated’ requirement of [§] 216(b).” Id. (citing 13 Symczyk, 569 U.S. at 75 ). Parties are similarly situated when “they share a similar 14 issue of law or fact material to the disposition of their FLSA claims.” Senne v. 15 Kansas City Royals Baseball Corp., 934 F.3d 918, 948 (9th Cir. 2019). “At this early 16 stage of litigation, the district court’s analysis is typically focused on a review of the 17 pleadings but may sometimes be supplemented by declarations or limited other 18 evidence.” Campbell, 903 F.3d at 1109 . “The level of consideration is lenient.” Id. 19 (internal quotation marks omitted). “The sole consequence of a successful motion for 20 preliminary certification [of a collective action brought under the FLSA] is the 21 sending of court-approved written notice to workers who may wish to join the 22 litigation as individuals.” Id. at 1101 (internal quotation marks omitted). 23 Here, Defendants do not oppose preliminary certification and agree that notice 24 may be issued, but they assert thirteen objections to Plaintiffs’ proposed notice. (See 25 Opp’n Cond. Cert. 1.) Defendants contend that: (1) notice should not be sent to any 26 dancer who signed an arbitration agreement; (2) notice should not be sent to any 27 dancer who worked after January 2019; (3) there is no reason for equitable tolling; 28 (4) Defendants should be given more than ten days to produce a list of putative 1 collective members; (5) the opt-in period should be sixty days, not ninety days; 2 (6) Defendants should not be required to post notice on their website; and (7) notice 3 should be dispatched by an independent third party so that Plaintiffs’ counsel cannot 4 use the information to solicit putative collective members. Defendants also contend 5 the notice should advise putative collective members that (8) they may not be eligible 6 if they signed arbitration agreements; (9) joining the action may require engaging in 7 discovery; (10) joining the action may result in the obligation for legal costs; (11) they 8 cannot recover if they received paychecks with deductions beginning in January 2019; 9 (12) they have the option of retaining their own lawyer; and (13) they have no 10 obligation to join the action. (Id. at 4–8.) The Court briefly addresses these 11 objections below. 12 1. Notice to Dancers Who Signed Arbitration Agreements 13 Defendants contend it would be a waste of time to send notice to any dancer 14 who signed an arbitration agreement. (Id. 4–5.) But “[g]enerally, the fact that a 15 FLSA plaintiff has signed an arbitration agreement will not preclude preliminary 16 certification of a collective action.” Ortega v. Spearmint Rhino Cos. Worldwide, Inc., 17 No. EDCV 17-206 JGB (KKx), 2019 WL 2871156 , at *5 (C.D. Cal. May 15, 2019). 18 Rather, courts in the Ninth Circuit “have granted conditional certification providing 19 notice to potential collective members and deferred the merits-based question of 20 whether the arbitration agreements are valid and enforceable to the second stage.” 21 Cuevas v. ConAm Mgmt. Corp., No. 18cv1189-GPC(LL), 2019 WL 5320544 , at *4 22 (S.D. Cal. Oct. 21, 2019) (citing cases). Similarly, here, notice shall not be withheld 23 from dancers who signed arbitration agreements. 24 2. Notice to Dancers Who Worked after January 2019 25 Defendants submit declaration testimony that they “began paying [the] dancers 26 with pay stubs and itemized deductions during January 2019, when the California 27 Supreme Court issued its Dynamex decision.” (Decl. of Mike Mudaris ¶ 2, ECF 28 No. 24.) Defendants suggest that because they began using pay stubs and tracking 1 wages and deductions in January 2019, dancers who only worked after January 2019 2 “have no claims, and any claims they may have are not similar to any claims of any 3 claims of a dancer who worked prior to that date.” (Opp’n Cond. Cert. 6.) However, 4 Defendants’ one-sentence, self-serving declaration testimony does not eviscerate any 5 possibility that a dancer who worked for Defendants after January 2019 may have 6 claims similar to those dancers who worked before January 2019. For instance, such 7 dancers may share similar claims relating to the forced sharing of tips. (See Reply 8 Cond. Cert. 7.) Accordingly, at this early stage of litigation, notice shall not be 9 withheld from dancers who worked only after January 2019. 10 3. Equitable Tolling 11 “The FLSA’s limitation period can be equitably tolled.” Delara v. Diamond 12 Resorts Int’l Mktg., Inc., No. 2:19-cv-00022-APG-NJK, 2020 WL 2085957 , at *7 (D. 13 Nev. Apr. 30, 2020) (citing Partlow v. Jewish Orphans’ Home of So. Cal., 645 F.2d 14 757, 760–61 (9th Cir. 1981), abrogated on other grounds by Hoffmann-La Roche Inc. 15 v. Sperling, 493 U.S. 165 , 167 n.1 (1989)) (tolling the statute of limitations based on 16 “the period of time it took for the court to rule on the motion for certification of a 17 collective action”). Here, the Court took Plaintiffs’ Motion for Conditional 18 Certification under submission on November 18, 2020, and the parties have waited 19 patiently for a decision while the Court has worked through an overladen docket. The 20 Court recognizes that “potential opt-in plaintiffs could be unfairly prejudiced by the 21 court’s delay in resolving the motion.” Delara, 2020 WL 2085957 , at *7 (internal 22 quotation marks omitted); see also Lew v. Countrywide Fin. Corp., No. C-08-199323 SC, 2009 WL 1384975 , at *3 (N.D. Cal. Feb. 24, 2009) (“The Court will not penalize 24 the Plaintiff or other members of the putative classes for its own docket-management 25 determinations.”). Thus, the limitation period shall be tolled from December 18, 2020 26 (thirty days after the Court took Plaintiffs’ Motion under submission), until notice is 27 finally approved. If a plaintiff opts in before such final approval, the tolling period for 28 that plaintiff shall be from December 18, 2020 until the date on which that plaintiff 1 files a written consent form. Tolling shall not apply to Plaintiffs who opted in before 2 December 18, 2020. 3 That said, Plaintiffs also seek to toll the statute of limitations for the duration of 4 the notice period. (Mot. Cond. Cert. 14–17; Prop. Cond. Cert. Order 2.) Defendants 5 correctly argue that Plaintiffs fail to support this request. (Opp’n Cond. Cert. 6.) In 6 fact, Plaintiffs acknowledge that the applicable statute of limitations under the FLSA 7 “continues to run for each putative plaintiff until he or she files a consent form opting 8 into the collective.” (Mot. Cond. Cert. 14 (citing 29 U.S.C. § 256 ).) Accordingly, 9 the limitations period shall not be tolled during the notice period. 10 4. Right to Retain Independent Counsel 11 Defendants contend the notice should advise putative collective members of 12 their right to obtain counsel who are not Plaintiffs’ counsel. (Opp’n Cond. Cert. 7 13 (citing Santinac v. Worldwide Labor Support of Ill., Inc., 107 F. Supp. 3d 610 , 618 14 (S.D. Miss. 2015)).) Plaintiffs do not address this objection in their Reply, and the 15 Court agrees it would be reasonable and appropriate to include this information. 16 Accordingly, notice shall advise putative collective members of their right to retain 17 counsel of their own choosing. 18 5. Defendants’ Other Objections 19 The remainder of Defendants’ objections to the proposed notice are either 20 unsupported by any legal authority, deemed unnecessary by the Court, or both. (See 21 Reply 7–14 (replying to each of Defendants’ remaining objections with applicable 22 case law).) The Court notes, however, that certain other aspects of Plaintiffs’ 23 proposed order appear equally unsupported or necessary to effect proper notice to the 24 putative collective members, even though Defendants do not appear to object to them. 25 The Court need not tediously elaborate on every minute aspect of Plaintiffs’ proposed 26 notice and order. Rather, the Court revises certain provisions in Plaintiffs’ proposed 27 order (in addition to the items already covered above) as follows: [28] 1 e Defendants shall provide Plaintiffs with a list of putative collective members 2 within fourteen (14) days of this Order, including their names, last-known 3 mailing addresses, email addresses, and dates they worked for Defendants; 4 e Upon the Court’s final approval of a notice and consent form, Plaintiffs shall 5 issue notice to putative collective members via email and United States Mail; 6 e Plaintiffs are authorized to send one (1) identical reminder notice via email and 7 United States Mail after the expiration of forty-five (45) days from the date on 8 which the initial notice and consent form are sent; 9 e Within ten (10) days of the Court’s final approval of the notice and consent 10 form, Defendants shall conspicuously post the notice and consent form on their 11 website and in each dressing room at Defendants’ business; and 12 e The notice period shall span a total of ninety (90) days. 13 | (Cf Prop. Cond. Cert. Order.) 14 VI. CONCLUSION 15 To recap, Plaintiffs’ Motion for Leave is GRANTED in part. (ECF No. 30.) 16 || Plaintiffs shall file their First Amended Complaint as proposed, no later than 17 || March 31, 2021. The caption shall not reflect any changes to the parties that occurred 18 || after the initial case filing. 19 Plaintiffs’ Motion for Conditional Certification is also GRANTED in part. 20 || (ECF No. 22.) The parties are ORDERED to submit a mutually agreeable notice and 21 || consent for final approval, consistent with the Court’s rulings above, within twenty22 || one (21) days of the date of this Order. [23] 24 IT IS SO ORDERED. [25] 26 March 25, 2021 A. LA 27 lied Let Af 38 OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE